Budget phones to check the Big 3 telecoms... Subsidiaries' market share exceeds half

Actual Occupancy Rate Excluding IoT Lines at 50.9%
Improvement Needed to Preserve Policy Intent
Government Considering Changes to Calculation Method

As of the end of February 2022

[Asia Economy Reporter Minyoung Cha] Confusion is intensifying in the Mobile Virtual Network Operator (MVNO) market. Although it is sailing smoothly after reaching 10 million subscribers, there are concerns that the current system needs revision as the market share of subsidiaries of the three major telecom companies has exceeded 50%, which contradicts the original purpose of introducing MVNOs to check the dominance of the three major telecom companies.

Yang Jeongsuk: "The Ministry of Science and ICT's MVNO statistics are incorrect"

According to data submitted by the Ministry of Science and ICT to Yang Jeongsuk, a member of the National Assembly's Science, Technology, Information and Broadcasting Committee, as of the end of February, the subscriber share of mobile phone lines held by subsidiaries of the three major telecom companies was 3.21 million out of a total of 6.31 million, accounting for 50.9%.

However, when calculated according to the Ministry of Science and ICT’s method, which includes Internet of Things (IoT) lines, the market share of the three major telecom subsidiaries drops to 31.8%. Including IoT lines, the share was 36.1% at the end of 2019, then decreased to 31.4% at the end of 2020, rose slightly to 31.9% at the end of 2021, and again to 31.8% as of February this year.

Assemblywoman Yang emphasized that the current method of aggregating MVNO statistics without distinguishing between mobile phone and IoT lines distorts the market. The increase in IoT lines is influenced by vehicle IoT. As of the end of February, vehicle IoT lines totaled 3.24 million. Hyundai Motor accounts for 2.1 million lines, Kia Motors 720,000, Mercedes-Benz Korea 320,000, Renault Samsung 40,000, Tesla 30,000, and Ssangyong Motor 20,000 lines.

To preserve policy intent, regulate the three major telecom companies

The National Assembly is raising its voice that the subsidiaries of the three major telecom companies have exceeded a majority share in the MVNO market and that institutional improvements are necessary. Youngsik Kim, a member of the People Power Party’s Science and ICT Committee, had previously introduced a representative bill in December 2020 to regulate indiscriminate entry into the MVNO market by telecom subsidiaries through amendments to the Telecommunications Business Act. The Citizens' Coalition for Consumer Sovereignty also recently urged the government to adjust the MVNO market share and prepare measures such as expanding the obligation to provide wholesale network access, citing that the MVNO market is concentrated in the subsidiaries of the three major telecom companies.

However, there are also concerns that premature regulation could hinder the growth of the MVNO market. While marketing subsidies are a factor behind customers’ preference for subsidiaries of large telecom companies, brand recognition, higher accessibility, and better customer service are also observed as reasons. The government is considering changes to the market share calculation method in light of these points. Since there is a registration condition that restricts operations if the subsidiaries of the three major telecom companies exceed 50% of the total market share, it is highly likely that this will be utilized.

This content was produced with the assistance of AI translation services.